Foreign direct investment flows to Asean rose to all-time high of $137 billion in 2017 from $123 billion in 2016, according to Asean Investment Report 2018.

The 2017 figure pushed up Asean’s share of global FDI flows to developing economies from 18 percent in 2016 to 20 percent in 2017, and the bloc’s share of FDI flows to East and Southeast Asia rose from 31 percent in 2016 to 34 percent in 2017.

In 2017, FDI flows to Indonesia rose from $3.9 billion in 2016 to $23.1 billion in 2017 while flows to Thailand tripled to $9.1 billion and flows to the Philippines saw a rise of 20 percent to $10 billion.

FDI flows to Vietnam was estimated at $17.5 billion in 2017, up 10 percent from the previous year, reported the general Statistical Office of Vietnam.

Intra-Asean investments, the biggest contributor, increased for the second consecutive year to a new height of $27 billion.

Meanwhile, strong investments from China, the Netherlands, Germany, Switzerland, and Australia also contributed to the higher inflows in 2017.

Three member States, namely Singapore, Indonesia and Vietnam accounted for some 72 percent of the FDI inflows, suggesting a high level of concentration of investment. However, FDI flows are gradually reaching more Asean countries.

Singapore remained the region’s biggest recipient, accounting for 45 percent of total FDI flows to Asean, though the volume declined from $77 billion in 2016 to $62 billion in 2017. The European Union and the United States were the largest investors in Singapore.

It would be interesting to see how FDI flow structure would change after Vietnam and Singapore have sign free trade agreements with the European Union.

Intra-Asean investment remained the largest source of FDI, contributing 19 percent to total inflows, in which Singapore was the largest investor of all sources with flows rising from $15.4 billion in 2016 to $18.3 billion, followed by Japan and China.

The combined share of the top 10 investors in the region dipped significantly, from 95 percent in 2016 to 68 percent in 2018, suggesting a greater diversification in sources of investment in the region in 2017.

While the composition of the top 10 investors did not change much, there were differences in their order.

The significant changes included a more than 100 percent rise in FDI from the Netherlands, a 71 percent drop in inflows from the United States and a decline by more than half in flows from the United Kingdom. Luxembourg dropped out of the top 10 while Germany joined the list. Investment from Australia and India rose.

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